Tax credits and development goals

I’ve felt called to move away from the lectionary readings this week and instead talk about Christian attitudes to wealth and poverty. This is a response to the news that we’ve been reading about in our newspaper’s, listening to on our radios or watching on our televisions.

I don’t think anyone can have escaped the public debate over the last couple of weeks about the cuts that the government is proposing to tax credits. Taking figures from yesterday’s Daily Telegraph 3 million families are going to lose an average of £1,300 of their income. This is one in every six families. These are not a randomly distributed 3 million families these are 3 million of the poorest working families in the country.

Less than a month ago our Prime Minister, David Cameron, was in New York addressing the General Assembly of the United Nations at the launch of their new Sustainable Development Goals. The first of these is to “end poverty in all forms everywhere”. The first sub-clause of this is devoted to ending extreme poverty defined as individuals living on less than $1.25 a day (about 80p). We should be thankful that there are very few people in the UK living on those incomes that low. The second sub-clause is to “reduce by half the number of men, women and children who are living in poverty in all its dimensions according to national definitions”. This is going to be difficult to assess for children in the UK because in July the government announced that it was no longer going to capture data on relative child poverty in the UK. Without that we won’t know whether child poverty is increasing or decreasing. Perhaps we can now see some method in the government’s apparent madness as the withdrawal of tax credits is almost certain to increase substantially the number of children living in relative poverty in this country.

The third sub-clause of the end poverty goal that out Prime Minister signed up to was a commitment to ”implement nationally appropriate social protection systems and measures for all”. At the moment tax credits are one of the UK’s primary social protection systems and the government are significantly reducing these. Poverty and how to address it is well and truly on the national agenda this week.

Most of the world leaders were extremely positive and welcoming of the sustainable development goals. The Pope was a little more reserved saying, “We must avoid every temptation to fall into a declarationist nominalism which would assuage our consciences.” It’s a bit wordy but what he was pointing out was that these are only goals. There is no concrete plan as to how to achieve them. Particularly in relationship to the poverty goals there is an implicit assumption that these will be achieved simply by allowing economic development to continue the way it has for the last fifty years or so. If we simply allow the world economy to continue to grow then some of those benefits will trickle down to the poor. Essentially the UN appears to be saying that if we do nothing then extreme poverty will disappear as a consequence of the trickle-down effect. As the rich get richer and the very rich get stupendously rich, then the poor will get a little less poor.

Other critics have gone further, examining the language used by the UN. They claim that this language treats extreme poverty as a disease. The first sub-goal is to eradicate poverty very much in the way that we have eradicated small-pox and are close to eradicating polio. It assumes that poverty is something like a virus, a malignant germ for which we are not responsible, but which we must fight against. Nothing could be further from the truth they say. Modern day poverty is largely a consequence of how man-made economic structures operate. Modern poverty is not a consequence of our failure to generate wealth, as assumed by the development goals, it is a failure of our capacity to fairly distribute wealth. Poverty, they argue, will never be eradicated by allowing capitalism and the God of the free market to flourish unrestrained because this is precisely what has caused the problem in the first place.

So what does the Bible say? This is quite an easy question to answer because so much of the Bible, including, large parts of Jesus’ teaching, is about attitudes to poverty and wealth. The picture that emerges is remarkably consistent throughout the Old and New Testaments. It is reflected in both our readings this morning. It’s radically different form the Sustainable Development Goals because throughout the Bible concern for the poor is balanced by condemnation of the rich. The rich are portrayed as part of the problem.

Luke’s version of the beatitudes, which we have heard this morning, is read much less often than Matthew’s perhaps because it is much less comforting. While both heap blessings on the poor, Luke includes condemnation of the rich:

But woe to you who are rich,
for you have already received your comfort.
Woe to you who are well fed now,
for you will go hungry.

For those of us who are rich, and from an international perspective, this includes all of us sitting here this morning, this is extremely challenging. It clearly identifies us as part of the problem.

But this is not an isolated text. Jesus words on this occasion reflect a substantial theme of Biblical writings tracing right back to some of the earliest texts ever written down. The acknowledgment that the rich and powerful are responsible for many of the ills of society can be traced to passages in Deuteronomy, Job, Jeremiah, Isaiah, the Psalms and Proverbs, Amos, Hosea and Micah.

In many places the Bible goes further and either demands or foretells a radical redistribution of wealth from the rich to the poor. Our reading from Deuteronomy this morning is of the law regarding the year of Sabbath. The basic principal was that at the end of each seven year cycle all debts were cancelled. Debt are generally owed by the poor to the rich so this is effectively a redistribution of wealth. This was done explicitly to ensure that there “will be no poor among you”. At the end of seven such cycles was a year of Jubilee when all wealth and land were distributed back to its original owners. The books where re-set and everyone was given a second chance. This redistributive mechanism is at the heart of the Judaeo-Christian tradition and was put there to ensure that the poor in society should never be allowed to get too poor and that the rich should never be allowed to get too rich.

The Sustainable Development Goals look through the wrong end of a telescope and see the poor as the problem and aim for their eradication. The Jews perhaps 2,500 years ago were far more advanced in their thinking in seeing that it is not the poor who are the problem, it is the rich. As one commentator said in the aftermath of the UN conference, we will never eradicate extreme poverty if we do not also set out to eradicate extreme wealth.

Even if eventually a trickle-down effect operating within current financial systems does eventually remove absolute poverty it is driving an even more unequal distribution of wealth within society. This is essentially the substance of Thomas Picketty’s recent book, Capitalism in the twenty-first century and is confirmed by almost all contemporary analyses of wealth distribution at national and international levels. The fundamental requirement for tax credits arises because incomes amongst the lowest paid in our economy have fallen so low over recent years that they are impossible for a family to survive on. This has occurred at the same time as the income of the highest paid in our economy have continued to escalate.

If anything our current tax system is reinforcing this inequality rather than resolving it. Figures released in July, and reported in the Independent, showed that the top 20% of households actually pay a smaller percentage of their income in tax of all forms than the lowest 20%. The planned reductions in tax credits will make this even more extreme.

Even if extreme absolute poverty is eventually eradicated we will have even more extreme relative poverty. The poor, as our Old Testament reading reminds us, are not a disease that can be eradicated, they will always be with us. The challenge for Christians is not how to eradicate the poor but how to welcome and accommodate them within society. It is not about how to generate ever more wealth, at the expense of the natural resources of a finite planet, but about how to distribute what we’ve got. It is about adopting a concern for the poor as a driver of our economic systems and acknowledging that this will require a redistribution of wealth from the rich. Above all it is about making Jesus own prophecy central to our economic goals:

“Blessed are you who are poor,
for yours is the kingdom of God.
Blessed are you who hunger now,
for you will be satisfied.
Blessed are you who weep now,
for you will laugh.”